Should sufficient support to start-ups be provided alongside crowdfunded equity backing, it will lead to more firms, more jobs, and more innovation all round.

Music, films, journalism and, most recently, higher education have all felt the disruptive power of the internet over the past decade. Now, venture capital (VC) looks to be getting its turn, with potentially massive implications for university start-ups currently struggling to find backing.

FundersClub, an electronic commerce start-up which allows any accredited investor to invest in startups in exchange for equity, was considered by some to be operating in a legal grey area as it wasn’t a registered broker-dealer. FundersClub maintained that its online venture platform broke no laws as it never directly handled invested money, which is kept in separate accounts for each startup on the site.

Now, the US regulator, Securities and Exchange Commission (SEC), has agreed with FundersClub, and this past week issued a “no-action” letter, which will allow the platform to continue trading.

Alex Mittal, FundersClub chief executive, said: “The letter is a win for accredited…

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